We have really come to enjoy Dave Stein’s posts. They are timely and cut straight to the heart of the issue. Today’s post is no exception. Working strictly on the sales side of organizations, one of the areas we look at while profiling their sale is compensation. Most importantly, we look to see if the compensation structure rewards the behaviors the company expects of the salesperson. More times than not it won’t and from one of Dave’s comments, he sees the same issues:
I am bringing this up because compensation is another dysfunctional area within many companies. During the past quarter, I’ve been engaged with several clients where “errors of commission” are preventing them from achieving their team and corporate goals.
We ran into a situation a few years back where a company President wanted to upgrade his sales team and bring in an experienced national salesperson who could help him grow his company. He was okay about having to pay more for sales experience, but his commission plan wasn’t aligned. The commission schedule for a sales person to break the 6 figure mark meant he or she would have to more than double the total revenue of the company. If they accomplished that feat, they should be running the company.
Through all this compensation discussion, Dave makes an extremely important point:
One important point: Having the right people in sales jobs comes first. The best comp plan in the world doesn’t mean much when the salespeople it is intended to motivate don’t have the requisite skills and traits to succeed.
I couldn’t agree more. If you don’t know where to begin, let us help you get started.